Buddy Schum has been awarded for the arresting design elements of his house remodels in Bucks County, and Carbon County PA. In the following article Buddy Schum explains what should be prioritized for maximizing returns on a flip or remodeling project.
Whether it’s purchasing a fix-and-flip for profit, or a home renovation passion project, almost all house renovations end in sales. But which renovations should you prioritize, and which are the most profitable for your flip?
Buddy Schum of Carbon County explains that the most profitable renovations for flips are kitchens, which can provide up to 80% return on investment. Modern interior design features cost a lot - new appliances, cabinets and countertops soon add up, and when flipped add value. A modern kitchen is a desirable feature of any household and contributes the most to any flip.
Other valuable renovations to make are in the bathroom. Buddy Schum says the arresting allure of modern showers, baths, and bathroom floor improvements are proving highly profitable. Any extension onto the house - extra stories, lofts, garages etc. - adds significant value but can be incredibly expensive. The profit margins aren’t as wide as fixing up an old kitchen or bathroom.
Kitchen Renovations
Buddy Schum of Bucks County explains that kitchen renovations are the no.1 way to increase value on a house flip, especially if it’s old. The renovations can set you back as much as $36,000 - but don’t need to. On the flipside they can offer ROIs as high as 86.6%.
Modern kitchen appliances and amenities improve a house’s value drastically. One of the best ways to increase value is to update appliances to match each other. This adds a sense of modernization and unity, two important prospects for house-buyers.
How much impact a kitchen remodel has on a house's value is of course dependent on the budget. On average, a major kitchen remodeling with things like granite countertops has an average return rate of 54% of the capital invested. Interestingly, a minor kitchen upgrade with mid-range fixtures has an ROI of up to nearly 78%!
Once you factor in costs vs profit, Buddy Schum of Bucks County explains that it’s easy to see why the returns are higher on smaller-scale renovations. That’s not to say expensive improvements won’t turn a profit, but the returns will diminish past a certain point.
Bathroom Renovations
After kitchens, bathrooms are the number one places to renovate if the goal is to maximize profit. Just as a kitchen renovates throughout the room and the appliances within, so does a bathroom. On average they offer a very similar ROI to kitchens, too, with lower budget requirements.
Modernized bathrooms are especially profitable. Buddy Schum of Carbon County explains that if damaged or outdated appliances are swapped out for newer counterparts, it can add 4-5% value to a house. A good bathroom renovation, including high-end tile and fittings, has a general return on investment of 67%.
Like kitchens, renovating bathrooms in order to maximize profits is a balancing act. More expensive renovations increase the value more, of course. But statistics show that less expensive improvements can sometimes generate higher ROIs. A midrange they generate on average a 64% profit, vs 56.6% on a more upscale remodeling according to Buddy Schum of Bucks County.
Other profitable renovations
Outside of the kitchen and bathroom, there are plenty of renovations that can be made to a house to increase its value. These include, but are not limited to:
- Garage door replacement
- Extensions (all kinds)
- Energy-saving amenities
Garage Door Replacement
Oddly enough, Buddy Schum of Bucks County says the single most profitable renovation that can be made to a house is replacing the garage door. According to the 2022 cost vs value report, a garage door replacement can generate a massive 93.3% ROI!
Why isn’t this a priority renovation, then? Well, not all homeowners have garages says Buddy Schum. People who live in apartments can’t renovate something they don’t have, after all. Furthermore, this renovation isn’t a priority compared to getting the essentials fixed.
House Extensions
Whether it’s a loft conversion, a garage, or the addition of a whole new story, extensions to a house will always provide a strong ROI. Not only that, but they can add appeal to houses that didn’t exist before that renovation.
According to Schofields, the most
profitable house extension is actually a loft conversion, which can increase house value by up to 16%. After that, double and single-story extensions can add up to 15% and 11% respectively, whilst a greenhouse adds 9% and a single garage 7%.
Still, Buddy Schum of Carbon County explains that these are big-ticket additions to houses that, for the sake of flipping, might be considered too expensive and/ or time-consuming. Additionally, depending on the location, these renovations could price out potential buyers.
Outro
So, Buddy Schum of Carbon County explains that when it comes to which renovations to prioritize when attempting to flip a house, the clear winners are kitchens and bathrooms. They hold massive sway and are one of the most important factors considered by potential buyers.
Cost vs profit statistics also back this up and show that houses with modern kitchens and bathrooms sell for more, more consistently. If you’re looking for a place to start renovating your fix-and-flip, Buddy Schum says don’t get overwhelmed or arrested by the details; make like a chef and get in that kitchen!
